Samsung Overtakes Apple in Handset Profits

Samsung became the world's most profitable mobile phone handset vendor in the second quarter of 2013, a quarter which saw smartphone unit shipments increase 46.7 percent year-over-year, according to market analysis company Strategy Analytics.

Samsung's mobile phone division made operational profits of $5.2 billion in the quarter. Apple dropped to second place, making profits from iPhone sales of about $4.6 billion, according to Strategy Analytics' estimates. Strategy Analytics said that Apple's sales of the iPhone 5 had been "lackluster" and that its margins had been reducing due to tougher competition from rivals, particularly in China.

Apple had been the most profitable handset vendor from the third quarter of 2009 to the first quarter of 2013, according to Strategy Analytics.

The smartphone sector grew in the second quarter of 2013 to 229.6 million units, up 47 percent from the same quarter a year before, according to the research firm. Samsung sold 73 million units to capture 33.1 percent of the global smartphone market, while Apple sold 31.2 million units to achieve 13.6 percent market share.

"The current iPhone portfolio is under-performing and Apple is at risk of being trapped in a pincer movement between rival 3-inch Android models at the low-end and 5-inch Android models at the high-end," said Neil Mawston, a director of research at Strategy Analytics, in a blog posting.

It would be interesting to compare the profit per unit for Samsung and Apple. Clearly, Samsung is making it up in volume, which is frankly an impressive feat. Lower cost doesn't always translate to higher profits.

I hear you. And it seems like it's been a while since Apple totally revolutionized a product category. But the company has done it four times. That's not to say it will necessarily do it again. But still, that's a pretty impressive track record. Maybe Apple is going through a lull, or maybe the magic left with Steve Jobs. But either way, Apple is well positioned to continue raking in the profits for years, at least.